Ariel and Eric celebrate the birth of their new daughter Melody on a ship at sea. Ariel's father King Triton present Melody with a magic locket. The party is interrupted by Ursula's younger sister Morgana, who threatens to hurt Melody, using her as leverage to get her grandfather trident. Ariel and Eric work to together to stop Morgana plan.
Fearing Morgana and remembering Ursula, Ariel choose to not let her daughter know about the sea world in order to protect her. The locket is thrown into the ocean, and a massive wall built between the castle and the sea in order to separate the two worlds. Triton gives Sebastian the task of keeping an eye on Melody.
Twelve years later, Melody remains unaware of her mother's true mermaid heritage and is not allowed to ever go into the sea. However, she has been sneaking out of the castle, swimming on a frequent basis she finds her locket. Seeing her name on locket, Melody confront her mother and is angry with her refusal to answer any of her questions, Melody takes a boat and sails away from her home. Her parents soon learn that she is missing, and Triton uses his magic to transform Ariel back into a mermaid to look for Melody.
Melody is lured into Morgana's lair by her minions, Cloak and Dagger the manta rays and Undertow the tiger shark, and Morgans uses the remains of Ursula's magic to temporarily transform Melody into a mermaid. Morgana states that the transformation will be permanent, if Melody can get the trident which she claims was stolen by Triton. With the support of Tip the penguin and Dash the Walrus, Melody successful returns with the trident in her hands. Ariel tries to stop Melody, but before she can explain that Morgana is evil, Melody gives Morgana the trident. With the trident in her power Morgana reveals her true intentions and grab Melody with tentacles and holds her hostage.
Morgana uses her trident's magic to lord over the ocean, rising to the surface to gloat. Scuttle, Triton, Eric and Sebastian arrive, and a battle starts against Morgana and her minions. Melody manages to grab hold of the trident and tosses it back to Triton by climbing up the cliff which Morgana is standing on and sneaks up on her. Triton uses his trident to encase Morgana in a block of ice which sinks underwater.
Melody, reunites with her family, Triton give Melody an offer to become a mermaid permanently. Instead, Melody uses the trident to destroy the wall separating her home from the sea, reuniting both humans and merpeople.